Still a Heavy Hand

Mar 3, 2004

Successful modern economies require
an enlightened approach to regulation, but the PT and its
congressional allies have not shaken off their suspicion of
market economics sufficiently to abandon the leading role of
the state in organizing and managing the economy. The
apparently independent regulatory agencies created during the
privatizations of the 1990s to oversee the power, telecoms and
oil industries, are now being systematically defanged and their
powers transferred to the government. PT ministers say it is
the government's job to determine policy and the regulators'
job to execute and monitor compliance with these policies.

The latest regulator to succumb is Aneel, the electric
industry agency. Legislation has stripped Aneel of policymaking
authority over bidding, concession contracts and tariffs. The
Mines and Energy Ministry has assumed these powers instead. The
market's...